The Twenty Four Seven Convenience Stores are one of India’s premiere and New Delhi’s only organised retail chain in the ‘round-the-clock’ convenience store format. Founder and President of the store chain Samir Modi , discusses the format and expansion plans.
How would your define the format of your Twenty Four Seven Convenience Stores?
Convenience stores have 3 simple criteria: Proximity, Operating Hours, and Range of Products. Our customer must be able to access our shops within convenient travel time – ideally under 7 minutes. The operating hours must be such that the shopper can shop at our outlets as per his/her convenient time. The range of products should be able to get all products required from the time you wake up to the time you sleep.
What would you attribute the success of the TFS store format to?
We have seen robust growth over the years which has been in double digits year on year. All our stores are performing well. Maturity reaches in the 24th month. The best performing categories at our stores are Ready to Eat and Beverages, which contribute 60 percent to 70 percent of our sales and the balance comes from non-food and services. Our business was designed around the winds of change to begin with. Now the focus is on customer delight and constant product range customisation to demand. We now want to increase our footprint fast. We have the concept, the brand visibility, and most importantly, there is demand for round-the-clock-shopping, be it emergency shopping, a hop-in option, or for impulse purchases.
Our stores with their modern look and ambience in terms of design, shopfitouts and equipment, offer an international shopping experience. Each of our outlets gets almost 2,000 daily footfalls. During 2013, TFS registered same store growth of 18 percent. We undertake in-store marketing, and varied activities such as introducing new products every month, festival-based promotions, annual event called Happy 24Seven Day, and distribution of promotional material to engage more and more customers.
What are the back-end strengths at TFS stores?
As regards our technology strengths, TFS’s employee management system runs on PeopleSoft enterprise resource planning (ERP) software. In December 2013, SAP ERP technology for store operations was introduced. We also also focus on improving customer service at the front-end, and have set up a training programme to enhance customer service and customer interaction. For new recruits, we have a dedicated training centre attached to an active TFS store for hands-on training. Our staff also attend grooming and etiquette sessions. Twenty Four Seven’s entire supply chain operations (logistics included) are managed by third party logistics (3PL) service provider. In 2013, we managed to keep both pilferage rate and damage expiry rate at less than 0.3 percent, thus achieving greater supply chain efficiency.
We want TFS to be the preferred choice of modern and busy consumers seeking round-the-clock convenience of shopping in a conducive and friendly environment. Primarily targeted at 18 to 35 year olds, our stores also cater to dual income families and busy professionals. The chain’s annual turnover was Rs 105 crore in 2013. Products, supply chain, technology and marketing have been our key focus areas in the past year.
How has consumption behaviour changed over the years?
Consumers are defined by their needs rather than their categorisations. We house a wide range of product categories and provide various services for the convenience of our customers who are working families, nuclear couples, individuals, housewives, teens and night owls. With the sudden rise of the organised sector in urban areas in the last decade, although slow as per worldwide industry standards, it has impacted the buying habit of the modern day consumer. The market has changed to a consumer-led market.
Modern retail formats allow the consumer to analyse the product at closer range and compare it freely with other substitutes, leading to higher product awareness and wider choice availability. With larger discount schemes and rising disposable income, consumers tend to hoard a larger quantity than required, leading to forced consumption. Ready to Eat meals and snacks have been rising in double digit percentage year on year. Convenience is the key to the nature of the products too. Apart from RTE, demand for various services have risen drastically.
How would you compare TFS with its nearest competitor In & Out?
Data gathered by us reflects that Twenty Four Seven Convenience Stores have been able to achieve the highest trading density amongst all it’s peers. We have done so ensuring the quality of the products provided by us are of the best quality and maximum shelf-life. We are not a store to off-load expiring products of the manufacturers. Our offerings are consistent across all stores. We have two models at present: One is the company’s very own TWENTY FOUR CONVENIENCE STORES located in residential areas as well as high streets. This format comprises of 100 percent of our offerings. The second is the model at Indian Oil Petrol Pumps, called INDIAN OIL TOP-UP TWENTY FOUR CONVENIENCE STORES. These stores carry a limited range of products as some are subject to government regulations. The nature of shoppers too differs at these locations, largely focusing on RTE’s and Services. Service standards and customer delight remain the highest priority in all our formats.
What are your plans for expansion?
Our tie up with Indian Oil Corporation is a long term association with the oil giant for opening convenience stores focused on catering to the transit consumer. IOC is India’s largest fuel retailing chain and we have around 10 such outlets at the petrol stations. We intend to tap at least 10 percent of IOC’s 21,000 petrol filling stations across the country. We plan to look at other locations besides high-streets such as residential neighbourhoods and transit locations such as airports, railway stations and metro stations, and are on the brink of launching our franchise. We have had an overwhelming response from all over the country since the last couple of years, and the organisation is banking on it being franchise operated. We would look at the franchisee model and would own just 10 percent of the total store count.
Your message to grocers who want to be as progressive as you?
To aspiring modern retailers I would say: Do not over burden yourself with increased inventory. Limit it to number of credit days if not 33 percent of it. Focus on select consumer groups and not run the rat race in trying to satisfy all.
Convenience and service
Samir Modi, Founder, Twenty Four Seven Convenience Store, introduced the Japanese Seven Eleven Store Chain concept in India with a vision to bring convenience to people’s life at any odd hour of the day or night. In 2005, Modi set up Twenty-Four Seven – India’s first convenience store that is open 24 hours, 7 days a week throughout the year, at Lajpat Nagar in New Delhi.
These stores provide a means to the young working populous with new and more comfortable options that meet their requirement and also those of the modern Indian culture. They offer customers an international shopping experience; offering variety of products and services. Products include ready-to-eat food, beverages, groceries, imported products, bakery items, over the counter medicines, etc, and convenient services such as utility bill payment, international and domestic courier, live counter, cold meats, etc.
Currently, the chain has 44 stores in Delhi/NCR at key locations, and it has recently expanded into Chandigarh with 4 four full fledged stores operating round the clock. In the next 5 years the chain plans to expand across India with over 100 stores through a strategic tie up with the State-promoted Indian Oil Corporation (IOC), under which it operates co-branded convenience store in collaboration with Indian Oil’s non-fuel retail brand Top-Up. The Rs 5,000 crore K.K. Modi Group plans to open nearly 1,000 such outlets at IOC petrol stations across the country.
TFS stores offer a wide range of products and services. Food and non-food categories comprise fresh food, groceries, vegetables, RTE (ready to eat) meals, frozen food, beverages, imported products, OTC pharmaceuticals, personal care products, travel accessories, toys, music, movies, magazines, and more.In groceries alone, they stock over 3,200 products in 14 different categories including the international range. The stores offer multiple services such as courier, drop boxes for cheque payments, automated self service kiosks for mobile and DTH recharge, utility bills payment, movie tickets, and travel booking.